The present study examines the role of glucagon in modulating the hepatic and extrahepatic effects of insulin on hepatic glucose production (HGP). We infused glucagon at a constant rate (0.65 ng x kg(-1) x min(-1)) during equimolar portal and peripheral insulin delivery in seven healthy males by our previously published tolbutamide infusion method. In contrast to our previous study, in which glucagon fell by approximately 30% during hyperinsulinemia and suppression of HGP was significantly greater with equimolar peripheral than with portal insulin delivery, HGP was actually suppressed to a lesser extent with peripheral insulin delivery (69 +/- 10%) than when insulin was delivered portally (76 +/- 5%, P < 0.05). To further examine whether glucagon was enhancing the effect of portal insulin, in four additional individuals HGP was suppressed to a greater extent during a tolbutamide infusion when glucagon was administered continuously throughout the basal and hyperinsulinemic periods than when glucagon was infused during the basal period only; HGP suppressed by 63 +/- 3 vs. 52 +/- 3%, respectively, P = 0.02). Tolbutamide had no effect on HGP when infused into three C-peptide-negative individuals with type I diabetes during a low-dose insulin and glucagon infusion. These data suggest that glucagon levels are an important determinant of the balance between insulin's direct and indirect effects on HGP, with glucagon likely potentiating the direct hepatic effect of insulin.